Correlation Between FTI Consulting and Franklin Covey

Can any of the company-specific risk be diversified away by investing in both FTI Consulting and Franklin Covey at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining FTI Consulting and Franklin Covey into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FTI Consulting and Franklin Covey, you can compare the effects of market volatilities on FTI Consulting and Franklin Covey and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in FTI Consulting with a short position of Franklin Covey. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTI Consulting and Franklin Covey.

Diversification Opportunities for FTI Consulting and Franklin Covey

-0.23

Correlation Coefficient

FTI Consulting  Franklin Covey

Very good diversification

The 3 months correlation between FTI and Franklin is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding FTI Consulting and Franklin Covey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Covey and FTI Consulting is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on FTI Consulting are associated (or correlated) with Franklin Covey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Covey has no effect on the direction of FTI Consulting i.e., FTI Consulting and Franklin Covey go up and down completely randomly.

Pair Corralation between FTI Consulting and Franklin Covey

Considering the 90-day investment horizon FTI Consulting is expected to generate 0.54 times more return on investment than Franklin Covey. However, FTI Consulting is 1.84 times less risky than Franklin Covey. It trades about 0.06 of its potential returns per unit of risk. Franklin Covey is currently generating about -0.01 per unit of risk. If you would invest  21,610  in FTI Consulting on February 23, 2024 and sell it today you would earn a total of  805.00  from holding FTI Consulting or generate 3.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

FTI Consulting  vs.  Franklin Covey

FTI Consulting

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FTI Consulting are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, FTI Consulting is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Franklin Covey

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin Covey has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Franklin Covey is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with FTI Consulting and Franklin Covey

The main advantage of trading using opposite FTI Consulting and Franklin Covey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTI Consulting position performs unexpectedly, Franklin Covey can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Franklin Covey will offset losses from the drop in Franklin Covey's long position.

The idea behind FTI Consulting and Franklin Covey pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.